Latest news with #FilmandTelevisionTaxCreditProgram
Newsweek
11 hours ago
- Business
- Newsweek
Gavin Newsom's Plan To Save Hollywood
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. California Governor Gavin Newsom has a big-budget plan to revive what has long been his state's signature sector—one that has lost its luster as film and television productions chase more lucrative opportunities out of state and overseas. In a bold move that has sparked debate about the future of the film industry and the Golden State's role within it, Newsom has proposed a significant expansion of California's Film and Television Tax Credit Program, which offers incentives to studios that choose to shoot and produce their shows and movies in the state. Last fall, the governor proposed more than doubling the size of the program to $750 million from $330 million—where it has remained since 2014—and has since been working to fold this into California's hotly debated budget. Newsom recently credited the program with bringing dozens of projects to the state, expected to employ 6,500 cast and crew and generate "$664 million in economic activity." However, he has argued that the expansion is necessary to ensure Hollywood does not lose its status as one of the entertainment industry's epicenters. "California didn't earn its role as the heart of the entertainment world by accident — it was built over generations by skilled workers and creative talent pushing boundaries," Newsom said in a statement. "Today's awards help ensure this legacy continues, keeping cameras rolling here at home, supporting thousands of crew members behind the scenes and boosting local economies that depend on a strong film and television industry." A spokesperson for the governor described the tax credit program as "a proven economic engine" in a statement to Newsweek, adding that, "at a time when other states are aggressively luring productions away from California, the Governor's budget is prioritizing a smart, strategic investment like this to keep good-paying, union jobs at home and protecting one of our most iconic industries." La-La Land's 'Dire Straits' The COVID Pandemic and its protracted effect on movie productions worldwide, the 2023 Hollywood labor disputes, and this year's wildfires have all spelled difficulty for California and its cinematic economy, and brought into sharper relief the issues Newsom believes could lead to its further decline. Add to this the already prohibitively high costs associated with shooting in L.A. According to a report published in May, the city's permit application fee is $3,724, compared to $1,000 in New York, $540 in London and only $400 in Atlanta, Georgia. Fueled by these low costs, as well as a tax incentive program that outdoes California's, Georgia has already become the nation's leading location for movie productions. Photo-illustration by Newsweek/Getty/Canva Further straining California's grip on the industry is the wider exodus of productions from American shores since COVID. As entertainment lawyer and industry expert Jonathan Handel puts it: "You have an increased number of locations fighting for slices of a smaller pie." Locations including the U.K., Australia, and Eastern Europe, he told Newsweek, have benefited from their own film subsidies and lower labor costs, while developing their own expertise and "crew depth." "The industry overall, I wouldn't say it's dying, but it is in dire straits," he said. "It's in a very difficult place." Trump's Movie Tariffs and Newsom's Big-Budget Plan It is these issues Governor Newsom has cited in arguing for increasing the state's film tax credit. According to the governor's office in October, around 71 percent of the projects that were rejected by the program subsequently chose to film out of state, costing California an estimated $1.6 billion in production spending between 2020 and 2024. And it is the wider growth in the desirability of shooting abroad that drew the ire of President Donald Trump, who in early May declared that the American movie industry was dying "a very fast death," while announcing an imminent, 100-percent tariff "on any and all movies coming into our country that are produced in foreign lands." The plan—dubbed "absurd" by Handel—was met with confusion from industry figures, who questioned how customs authorities would be able to apply a tariff on an intellectual property article such as a movie, or portions of one shot abroad then spliced together by a team in the U.S. "Does that mean you can hold up the movie in customs? I feel it doesn't ship that way," was the reaction of director Wes Anderson when asked about the prospect during the Cannes Film Festival. Jon Voight, one of Trump's unofficial envoys to Hollywood, did not comment on the specific remedy, but told Variety that "something has to be done, and it's way past time." And Trump's sentiment received similar support from Newsom himself, despite his tenure as California governor being increasingly defined by a series of bitter and public clashes with the president. Newsom proposed a $7.5 billion nationwide tax incentive program – which the U.S. currently lacks – and said he was "eager to partner with the Trump administration to further strengthen domestic production and Make America Film Again." Following Trump's Truth Social policy announcement, the White House swiftly clarified that "no final decisions" had been made on the possibility of tariffing foreign films. And since then, there have been no concrete developments regarding either this plan or Newsom's proposal. The governor's office said it is still eager to work with Trump to this end, and has offered the administration technical expertise and implementational guidance to help "keep American stories made on American soil." However, the spokesperson expressed disappointment that this plan was not included as part of the reconciliation bill – the sweeping legislative package currently making its way through Congress and comprising much of Trump's domestic agenda – adding: "Perhaps the Trump administration isn't as committed to the success of America's film industry as they have suggested they are." But the governor has been successful in his California-focused efforts, recently reaching an agreement with state lawmakers to include hiking the film tax credit program in the budget, just in time for the July 1 start of the fiscal year. "The expansion will be successful," said a spokesperson for SAG-AFTRA, America's premier labor union for media professionals working in film and television. "With the doubling of the CA production tax incentive program, we believe it will help attract and retain many new productions to the state." However, Handel said restoring Hollywood's former glory is "not going to be easy," and added that the tax credits alone are "not going to be a miracle cure." He noted that key elements of a production, such as actors' salaries, will remain ineligible for rebates under the $750 million program. Ben Samek, whose company Banijay has produced shows such as MasterChef and Below Deck, criticized Newsom's plan for failing to include unscripted TV productions within its purview. In an article for the Hollywood Reporter, Samek wrote: "The Governor's current plan falls short of the bold vision needed to restore California's position as a global entertainment hub – especially when it comes to unscripted television, which is not only an area where I am especially well-versed but also a genre where the speed and long-term repeatability and expansion of franchises can pay immense dividends to local economies." But Newsom's proposal appears to be the most significant legislative effort to stave off the growing threats to Hollywood, and is expected to add nearly $5 billion to the California economy annually. If La-La Land is to avoid becoming a museum to its own golden age, the plan marks a meaningful first step toward reversing its long-term decline.
Economic Times
04-06-2025
- Business
- Economic Times
California Film Credit expansion claims to bring back jobs; effect remains uncertain
iStock California Film Credit expansion California legislators are moving to greatly expand the state's Film and Television Tax Credit Program as a means of stopping the flow of runawaproduction and revitalizing a struggling entertainment industry. The expansion, if approved, would double the program's annual limit from $330 million to $750 million. But, even with the broad changes, analysts and industry officials warn that the effect on employment might not be as dramatic as anticipated. As reported by the California Film Commission, the expansion would increase direct employment by 40–50%, or approximately 4,400 to 5,500 new cast and crew jobs. However, this is only a small portion of the 17,000 jobs that have been lost since 2022, according to figures presented by the Motion Picture Industry Pension and Health Plan. The Bureau of Labor Statistics further reports that California experienced a decline of approximately 40,000 jobs within the industry since before the pandemic, with some entertainment unions having claimed that as much as half of their members have been laid off. Assemblyman Rick Chavez Zbur, chief sponsor of the expansion, recognized the limitations: 'This is not a panacea. It will not reverse the steep slide in jobs, but it will bring some of the jobs back.' He pointed out that increasing the payout might attract more high-budget films to film in California instead of abroad, although the state's incentive is still smaller per job than those from New York and Georgia. Economic studies provide conflicting views. A recent study for the Milken Institute indicated the expansion could create an additional 14,886 jobs accounting for ripple effects on the economy. The California Legislative Analyst's Office has challenged such assertions, however, to say there is "no compelling evidence" film tax credits significantly improve the overall state economy and that incentives instead could simply displace other economic activity. Industry supporters, such as Local 724's Alex Aguilar and Rebecca Rhine of the Directors Guild of America, recognize that any forward movement is necessary. Rhine commented, 'While more resources would lead to more jobs, we recognize the challenges of the current moment and competing priorities. Action is necessary now, and we cannot allow the perfect to be the enemy of the good.'The California Film and Television Tax Credit Program is a state incentive program that provides film and television production companies with tax credits they can use to offset part of their qualified costs in order to incentivize them to film their productions in California. The overall objective of this program is to assist in the creation and retention of jobs within the entertainment sector in the employments of Californians that benefit not just the actors and directors but also the large network of crew, technicians, and local businesses dependent upon film and television the plan, eligible productions—feature films, TV series, miniseries, and pilots—can qualify to get tax credits normally between 20% and 25% of their qualified expenditures, based on the type of project and whether produced by an independent or non-independent credits cut into the tax obligation of the production companies directly, so it is more desirable for them to shoot in California than elsewhere in other states or nations that provide similar program is specifically designed to generate the highest employment. For example, productions have to spend a minimum of 75% of their production budget or principal photography days in California in order to qualify, so that lots of money is spent locally and employment is generated for the people of California.
Time of India
04-06-2025
- Business
- Time of India
California Film Credit expansion claims to bring back jobs; effect remains uncertain
California legislators are moving to greatly expand the state's Film and Television Tax Credit Program as a means of stopping the flow of runawaproduction and revitalizing a struggling entertainment industry. The expansion, if approved, would double the program's annual limit from $330 million to $750 million. But, even with the broad changes, analysts and industry officials warn that the effect on employment might not be as dramatic as anticipated. As reported by the California Film Commission , the expansion would increase direct employment by 40–50%, or approximately 4,400 to 5,500 new cast and crew jobs. However, this is only a small portion of the 17,000 jobs that have been lost since 2022, according to figures presented by the Motion Picture Industry Pension and Health Plan. The Bureau of Labor Statistics further reports that California experienced a decline of approximately 40,000 jobs within the industry since before the pandemic, with some entertainment unions having claimed that as much as half of their members have been laid off. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Massive Refunds Rolling Out from Close Brothers - Lookup Your Name Get Offer Undo Assemblyman Rick Chavez Zbur, chief sponsor of the expansion, recognized the limitations: 'This is not a panacea. It will not reverse the steep slide in jobs, but it will bring some of the jobs back.' He pointed out that increasing the payout might attract more high-budget films to film in California instead of abroad, although the state's incentive is still smaller per job than those from New York and Georgia. Economic studies provide conflicting views. A recent study for the Milken Institute indicated the expansion could create an additional 14,886 jobs accounting for ripple effects on the economy. The California Legislative Analyst's Office has challenged such assertions, however, to say there is "no compelling evidence" film tax credits significantly improve the overall state economy and that incentives instead could simply displace other economic activity. Live Events Industry supporters, such as Local 724's Alex Aguilar and Rebecca Rhine of the Directors Guild of America , recognize that any forward movement is necessary. Rhine commented, 'While more resources would lead to more jobs, we recognize the challenges of the current moment and competing priorities. Action is necessary now, and we cannot allow the perfect to be the enemy of the good.' What is California's Film and Television Tax Credit Program? The California Film and Television Tax Credit Program is a state incentive program that provides film and television production companies with tax credits they can use to offset part of their qualified costs in order to incentivize them to film their productions in California. The overall objective of this program is to assist in the creation and retention of jobs within the entertainment sector in the employments of Californians that benefit not just the actors and directors but also the large network of crew, technicians, and local businesses dependent upon film and television production. Under the plan, eligible productions—feature films, TV series, miniseries, and pilots—can qualify to get tax credits normally between 20% and 25% of their qualified expenditures, based on the type of project and whether produced by an independent or non-independent firm. These credits cut into the tax obligation of the production companies directly, so it is more desirable for them to shoot in California than elsewhere in other states or nations that provide similar incentives. The program is specifically designed to generate the highest employment. For example, productions have to spend a minimum of 75% of their production budget or principal photography days in California in order to qualify, so that lots of money is spent locally and employment is generated for the people of California.
Yahoo
03-06-2025
- Business
- Yahoo
California Senate Approves Film & TV Tax Credits Bill
In a near-unanimous vote, the California Senate today passed its version of legislation aimed at expanding and retooling the state's Film and Television Tax Credit Program. The vote on Senate Bill 630 was 34-1, with the only nay coming from Sen. Roger Niello, who represents the city of Sacramento and surrounding areas. The bill (read it here) now moves on to the state Assembly. More from Deadline Show Us The Money: When Can Productions Expect To Reap Benefits Of California's Proposed $750M Film & TV Tax Credit Expansion? SAG-AFTRA's 'Here's Looking At You L.A.' & Mayor Karen Bass Push For State & Federal Tax Incentives To Get Hollywood Working Again Sweetened New York Production Incentives A Go As State Budget Passes Along with Assembly Bill 1138 — which passed the Appropriations Committee last month — the legislation would expand the definition of a qualified motion picture, allowing additional projects to apply for the program, including series with episodes averaging 20 minutes or more, animation films, series, and shorts, and large-scale competition shows. After years of strife for the California film and television industry, Gov. Gavin Newsom in October proposed a significant increase to the overall cap on incentives, more than doubling it from $330 million to $750M annually. SB630 and AB1138 seek to do more than just provide additional finance incentives to studios who bring physical production back to California. The sister bills also are meant to 'amend, update, and modernize' the program. The legislation comes amid the latest spurt of runaway production as other states ramp up their film and TV tax incentives programs in an effort to lure production away from California. New York last month passed a state budget that includes expanded incentives. RELATED: Also getting Hollywood's attention is President Donald Trump's bombshell announcement of planned tariffs on movies produced outside the U.S., which were decried many in the industry, along with Newsom, who said Trump has 'no authority' to impose the tariffs. Here is how the voting on SB630 went: Best of Deadline 2025-26 Awards Season Calendar: Dates For Tonys, Emmys, Oscars & More Everything We Know About 'Nobody Wants This' Season 2 So Far List Of Hollywood & Media Layoffs From Paramount To Warner Bros Discovery To CNN & More
Yahoo
06-05-2025
- Business
- Yahoo
Newsom asks Trump to work together on $7.5 billion Hollywood tax credit
California Gov. Gavin Newsom (D) is offering to partner with the Trump administration to create a federal film tax credit program worth at least $7.5 billion to boost domestic film production, his office said late Monday. The proposal came after President Donald Trump set Hollywood on edge by calling for massive tariffs on foreign-made films to address what he described as the 'DYING' American film industry. If the proposal comes together, it would be the largest government tax initiative for the film industry in U.S. history and the first such program at the federal level, a spokesperson for Newsom's office said. Subscribe to The Post Most newsletter for the most important and interesting stories from The Washington Post. 'America continues to be a film powerhouse, and California is all in to bring more production here,' Newsom said in a statement. He added that California is 'eager to partner with the Trump administration to further strengthen domestic production and Make America Film Again.' The White House did not immediately respond to a request for comment. Newsom, a fierce Trump opponent, is making the request at a time when tariffs have upended the global economy and sowed uncertainty across many industries. Newsom sued the Trump administration last month to block the president's sweeping tariffs, arguing they are causing irreparable harm to California's economy. Trump's call Sunday night for 100 percent tariffs on films produced overseas, in which he described foreign films as a national security threat, puzzled insiders in the highly globalized industry as to its implications. It was not clear how such tariffs would be applied or how they might affect U.S. films shot overseas or involving production abroad, The Post reported. Andrew deWaard, an assistant professor at the University of California at San Diego who studies the relationship between culture and commerce in the film industry, said the program proposed by Newsom on Monday is 'highly unlikely' to go into effect. 'I can't imagine in such a partisan atmosphere that Trump would want to be seen subsidizing California entertainment workers just as the tariffs are starting to negatively affect U.S. factory workers, farmers, truckers, etc.,' he said in an email. 'I think Newsom is calling Trump's bluff,' he added. '… If Trump balks, which is likely, then Newsom can say he tried to be bipartisan.' Newsom's office described the proposed federal tax credit as a way to bolster American stories, create U.S. jobs and benefit the industry's behind-the-scenes workers such as set builders and electricians. The proposal would be modeled after California's Film and Television Tax Credit Program that Newsom's office said has generated more than $26 billion in economic activity and supported thousands of jobs across the state since its inception in 2009. But there is debate over the effectiveness of such film tax credits. In testimony to the state's Senate Revenue and Taxation Committee this year, Michael Thom, a professor at the University of Southern California who has researched tax incentives for film and television production, said such initiatives 'fail to stimulate enough economic activity to justify their substantial cost.' --- Video Embed Code Video: President Donald Trump said on May 4 that he wants tariffs on all foreign-made movies, saying other countries have "stolen" the American film to The Washington Post Embed code: Related Content At a Kentucky farm, star racehorses help people fight a monster: Addiction
